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Treasury Secretary Steven Mnuchin on Thursday floated the idea of the US government issuing an ultra-long government bond next year, if there's demand.

"We are looking at issuing a 50-year bond, what we could call an ultra-long bond," said Mnuchin during an interview with CNBC's "Squawk Box." "We think there's some demand for it and that's something we'll very seriously consider for next year."

Historically low interest rates hovering between 2% and 2.25% could make this an attractive time for the Treasury Department to pursue such a proposal, but Wall Street has had a tepid response so far.

Long-term investments typically pay more interest than short-term ones, making them potentially good bets for investors. But the yield curve has recently inverted, sending longer-term Treasury yields below short-term bonds. That means people would have to take less interest over the long-haul, making them potentially less attractive than in normal situations.

"I personally think it's a good thing to expand the borrowing capabilities," said Mnuchin, suggesting it was a "quite attractive" time for the US government to extend and derisk the US Treasury markets.

The Trump administration would also get the added benefit of lowering borrowing costs as it faces a budget deficit nearing $1 trillion.

Rates around the world have been dropping since 2018, with some now in negative territory, driving investors into longer-term US bonds.

The treasury secretary said he anticipated that investors might be drawn even more to buying up US bonds following the decision by the European Central Bank to cut rates below zero.

"I wouldn't be surprised if a lot of people start selling foreign bonds at negative rates and buying US Treasuries, which would have the impact of narrowing those spreads," said Mnuchin.

The secretary avoided weighing in on the Federal Reserve's interest-rate policy decisions when directly asked about President Donald Trump's tweet on the subject Wednesday.

Instead, Mnuchin pointed to the challenges facing Europe with negative rates, suggesting it would be harder for banks to make money and could undermine the economy.

"It's very hard for banks to make money in negative interest rates, and if banks can't make money it's hard to have a good economy," said Mnuchin.